Free Essay Dedicated to Aji Ichiban and Its Strategic Management

Published: 2022-06-10
Free Essay Dedicated to Aji Ichiban and Its Strategic Management
Type of paper:  Essay
Categories:  Strategic management
Pages: 7
Wordcount: 1891 words
16 min read

Aji Ichiban is considered as one of the largest FMCG retail shop involved in supplying food franchises. It was established in 1993, in Hong Kong, by Lai Hin Tai and Lai Chan Yuk Hing. They were its managing director and president respectively. The company has developed and expanded to over 90 international destinations around the world. The business is not limited to only one product. The products sold depend on the location and vary from place to place (Kan, 2016). The items entail various flavors ranging from wasabi peas, shaped gummy candies and hamburger, hot dog, shrimp crackers, shredded and fried squid, chili olives, plum tablets, spicy dried fish, nonpareils, chocolates, skittles, dried apricots, beef jerkies (all these are American, East Asian, African, French as well as Japanese cuisine). Additionally, to provide products that generate gustatory appeal, its shops around the world have products that are closely tied to traditional Eastern medicines. Customers have the opportunity of tasting the snacks before buying them. They pay for the items depending on weight and nature.

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The present strategy of Aji Ichiban

According to Vicari (2016), Aji Ichiban has a merchandising strategy that is so straightforward and simple. Merchandisers plan and execute purchases on the basis of the budgets of procurement that are reverse-calculated routinely, for example, after some months (3 or 6), monthly or even weekly; targets for sales, delivery lead-times, and factoring the considerations as far as deliveries are concerned. The Aji Ichiban regards its stores as a platform where supplies are sought and done while aligning its interests with that of the suppliers (Zipser et al., 2016). Owing to the fact that they would need to have autonomy as far as pricing is concerned; most suppliers in the domestic market have little interest in servicing Aji Ichiban. Therefore, the supply chain relies on its merchandising sources on parallel imports.

Aji Ichiban has been importing container-loaded products from foreign suppliers. However, it does not use its wide scale of operations trying to negotiate how to be the sole sales channel of FMCG products in Hong Kong (Mvubu & Naude, 2016). In the beginning, maintaining a steady supply was not one of Aji Ichiban's priorities, especially in best-sellers or hot items. One of its working strategies is to supplement shortages in a particular product with an introduction of a new product or, at least, with a similar product. With almost 18 years of operation in FMCG products, Aji Ichiban is now managing effectively a steady supply of its best-sellers across the 90 international destinations.

Business Operation Management of Aji Ichiban

Aji Ichiban administers its business practices in an efficient manner with an intention of creating a high level of effectiveness. It converts labor and material into food products and services in an efficient way, an approach that helps it maximize profits. It attempts to balance the revenue generated and the costs to attain higher net profit as a result of its operation in the market. Aji Ichiban has a management team that deals with several issues as far as strategic planning is concerned. The team determines the methods of project management and the size of destinations where it can stock its products. It also executes the information technology networks structure. Aji Ichiban has a team that also deals with inventories, for example, the acquisition of raw materials, levels of work-in-process, handling materials and quality control as well as maintaining the company's policies.

Aji Ichiban important resources and capabilities

Aji Ichiban its strong relationship it enjoys with its suppliers, capabilities, and resources, as long as the variety of items it produces, stakeholders, and customers as its strength. It uses this strength to achieve more profits and earn and maintain customers' loyalty. For instance, by making various products in all of its destinations, in which Aji Ichiban achieves using its capability in establishing a working relationship with its suppliers; both local and foreign enhances its strength and its resources. It is also able to produce goods that are closely tied to the tradition of the people where they situate an outlet.

Additionally, the decision of establishing business-supplier partnerships with other firms that are involved with the FMCG products, that complement its items as well as appealing to clients across its destinations, is one of the Aji Ichiban's capabilities that give it an opportunity of achieving success as far as loyal and future customers are concerned.

In terms of location, Aji Ichiban is expanding both locally (Hong Kong) and internationally. Aji Ichiban is heavily investing in Asia Pacific and Europe as well as the United States. Its channels of distribution are both its resource as well as its capability. Its products, so far, are found in over 90 destinations, domestically and internationally. They can be ordered online or purchased from office buildings or grocery stores.

Similarly, Aji Ichiban has a high reputation as far as the global market of FMCG products is concerned. For instance, Aji Ichiban supports several social causes that, in turn, results in maintaining a positive image of the corporate social citizen. Aji Ichiban considers itself being among several companies that generate employment to communities. It has a reputation for high-quality products. Finally, Aji Ichiban's brand signifies quality which is both a result of its capability as well as a resource. Its brand is entrenched in the magnificent consumer culture. It has received a wide and global recognition with its identity intact.

According to Leibold (2015), the ability of Aji Ichiban to overcome external threats and take advantage of market opportunities

Aji Ichiban is a dominant force as far as FMCG products are concerned in Hong Kong and most parts of the world (the United States of America, Europe, and Asia). Since its inception in 1993, it has been penetrating this market with optimism and better strategies. The market craves for its product because of quality, price, taste and preferences, accessibility, and nature of the products since they are tied to their culture. Aji Ichiban is able to compete in the foods market and stay relevant for a very long time. Aji Ichiban aligns its performance objectives with their strategic objectives as well as its capabilities. As far as regulatory requirements are concerned, Aji Ichiban does not gamble, it ensures that it meets all the requirements from the point the products depart from their side to the consumer (Panigyrakis & Veloutsou, 2015 pp.322).

It is also important to note that Aji Ichiban's customer relationship is good. It employees assert that working for Aji Ichiban is the best job they have ever had at the right place, serving the right people. This observation means that the company has an advantage in staying relevant in the market because it has a rejuvenated and motivated workforce with a good customer relation. The processes of operations in Aji Ichiban are streamlined as well. Additionally, many of Aji Ichiban customers are multi-nationals. With the increasing global population, Aji Ichiban understands that the market is expanding, competitors are increasing, and it is strategically preparing to remain relevant.

The competitiveness of Aji Ichiban products' cost as compared to the rivals'

According to Kumar et al. (2015 pp.128), Aji Ichiban understands that it is not in the market alone. There are other competitors producing the same products and, perhaps, using the same approach. Therefore, it knows it is incumbent to it to price their items at a cost that will keep more customers coming to its destinations and, in turn, remain loyal. It prices and costs are competitive as compared to those of its arch rivals. Aji Ichiban has attempted several approaches to give its items essential features to become suitable for potential customers that keep on increasing every day. It conducts research often to understand the best way of lowering costs as far as every function is concerned. This strategy is working because Aji Ichiban has wider sources. The low costs provide Aji Ichiban with an opportunity to become resistant in the case of price wars with competitors and it is also a good step in making profits. Aji Ichiban produces its items at a lower diversification level which, in turn, draws more potential customers to its shelves as compared to its competitors.

Aji Ichiban is investing heavily in producing technologies to lower the costs of production, distribution as well as using cheaper inputs. It has an elaborate structure and system of managing both costs and prices. This makes Aji Ichiban focus on producing items at a lower cost compared to its competitors, hence, lower prices for its products, more customers, and more profits. With such a strategy, Aji Ichiban may opt to sell its products at a lower price than its competitors or sell at the market price. It is, therefore, very difficult for competitors to brush Aji Ichiban away easily or any soon. It is also important to mention that Aji Ichiban has an appealing customer value promotion in all of its items. Products are of high quality and cheaper prices, as well as the consumers' taste and preferences, are catered for. These observations make Aji Ichiban competitively stronger as compared to its key rivals.

Strategic problems and issues that warrant the attention of the management

According to Bellin (2016 pp.257), every big company is worried about the entrance of a foreign competitor in the market because this means that they will have a share in the market and possibly reduce the number of buyers for the company. The new foreign company may decide to use cheap labor and, in turn, sell their similar products at a lower price than what the company is selling. Therefore, the challenge of meeting these uncertainties requires the priority and attention of the management. Another issue is how the company can combat the discounting prices of the competitors. This phenomenon is a trend in the market. Different companies come up with different discounts offer on their similar products and this may find the company off-guard leading to the attention and priority of the management.

Another issue is how to prepare for the reduction of price or production costs to keep in line with the changing market trend, stay relevant, keep customers and earn their loyalty. The management of the company must be involved in making such priorities a success (Shi et al., 2017 pp.398). Additionally, in the event that there are slow sales, the management is faced with a challenge of how to sustain growth. To increase the product line to consumers, how to rapidly expand, to correct the deficiencies of the company in a competitive market, and to counter the increasing interest of consumers in the substitute item are all the issues that management's attention is needed. Lastly, it is the issue of determining the best approaches to adapting to the changing customer demographics across the market in all destinations.

How Aji Ichiban creates value for its customer

Customer value is considered to be the results the customer gets when the subtract benefits form costs. Aji Ichiban ensures that the customers do not only pay the price but also non-price terms like inconvenience, energy, effort and time that they would have experienced in other places. Aji Ichiban makes sure, through several initiatives and strategies, that its customers get the quality of the product, the brand of the company, and the positive image as they are able to enjoy the product, the experience of shopping at Aji Ichiban, the values attached on the relationship between customers and Aji Ichiban.

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